Is Miami the ‘epicenter’ of nation’s housing crunch? Here’s how crisis has mounted

The nation’s top housing official called Miami the “epicenter” of the housing crisis in the United States.

“I decided I was going to Miami, to the epicenter of the housing crisis in this country,” Marcia Fudge, secretary of Housing and Urban Development, said Tuesday during a visit to Miami-Dade County’s Liberty Square complex, a $300 million yearslong redevelopment in Liberty City of one of the nation’s oldest public housing projects.

The Miami Herald has been documenting the skyrocketing housing market in Miami and across Miami-Dade County. Existing homes and condominiums are out of reach for most local residents who want to buy, and ballooning apartment rents are too high for many people across the county to afford.

It’s led to a home affordability crisis that city and county elected leaders have acknowledged — and now the HUD secretary is seeing and learning about in her tour of Miami Tuesday and Wednesday.

Here’s a rundown of key housing benchmarks and related highlights so far this year and in 2021 to understand the scope of Miami-Dade’s overheated residential real estate market, and how the county has become the most expense place to live in America:

▪ RentCafe in a report released this week found that Miami-Dade County is the most competitive housing market. There are 31 prospective renters competing for every vacant apartment in Miami-Dade, compared to 14 as the national average. Broward County is also ultra competitive, with 19 renters competing for every vacant unit.

▪ Higher demand has also led to higher home rents. Miami now ranks fifth in Zumper’s June national ranking of average rents, at about $2,400 a month for a one-bedroom apartment. While that’s up 25% from a year ago, Zumper noted “Miami’s red-hot market is beginning to cool” since it held the No. 3 slot in the spring. Only New York, San Francisco, San Jose and Boston have high median apartment rents this month than Miami.

▪ The housing prices in South Florida reached historic highs in May, after several months of jumps vaulted price tags on existing homes beyond what most residents in Miami-Dade County can afford. Last month, the median sales price of $575,000 for single-family homes climbed from $500,000 in May 2021, while median condo prices hit $415,000, a big increase from $325,000 a year ago, according to Miami Association of Realtors’ data. The prices for single-family homes and condos have increased steadily each month from $485,000 in September 2021 for homes and $326,790 for condos in October 2021.

▪ Propelled by scorching demand, rising prices and a torrent of new construction, South Florida’s property values have escalated steeply, providing a boon to owners of homes and commercial and industrial real estate — but also raising the prospect of big tax hikes and a deeper housing affordability crunch. Preliminary estimates of taxable property values released by Miami-Dade and Broward counties show valuations for all types of property rose more than 10% overall in both counties as of the end of 2021 compared to the previous year. That’s faster than values had risen in many years.

▪ Most locals faced home rent hikes exceeding 50% in the two-year stretch since the start of the pandemic in Miami-Dade County, but landlords demanded even more money, increasing rents up to 115% in certain cities and neighborhoods. The Herald in May analyzed rental costs countywide and ranked the areas with the highest median rent increases between March 2020 — when the first COVID-19 cases were reported in Florida — and March 2022, according to data from the Multiple Listing Service and Ron Shuffield, CEO of Berkshire Hathaway HomeServices EWM Realty.

The home rental figures show why Miami-Dade has become by most national housing cost rankings the most expensive place to live in America right now, and it provides more convincing evidence of the home affordability crisis gripping the county. The areas in the county included in the Herald’s residential rent analysis each had at least 20 lease deals monthly the past two years for apartments, condominiums, townhouses or standalone studios. Sunny Isles Beach topped the list of biggest increases with a 115% jump in median rental cost, followed by Miami Beach (72%), North Miami (69%), Edgewater (67%) and Doral (50%). Except for Doral, residential rent inflation in these areas exceeded that of the city and Miami-Dade. County residents saw a 57% median increase over the two-year period, from $1,750 a month to $2,750, while people renting in the city saw a 55% boost — from $2,100 monthly to $3,250.

▪ As frustration continued to mount due to increasing apartment rents across Miami-Dade County, the Herald ranked the areas with the cheapest median rents in Miami-Dade, based on the prices for efficiencies, studios, one-bedroom and two-bedroom apartment and condo units. In April, locals could land deals below the county’s $1,600 median monthly asking price for apartments in 10 neighborhoods.

▪ Finally declaring a housing affordability crisis in April, Miami-Dade County Mayor Daniella Levine Cava and her colleagues face the daunting challenge of trying to make homes more affordable for residents. “We have become the most unaffordable place in the country,” Levine Cava said, noting that’s “what’s different now.” As a first step, the county mayor announced the Building Blocks Program, an effort to use $13.4 million in federal funding for Miami-Dade’s emergency rental assistance program to help tenants struggling to pay rent.

▪ A fresh report from Realtor.com in March based showed surging housing rental prices have caused Miami metropolitan area residents to become the most burdened by rent in the nation. Home rents in the Miami metro area had climbed more than 55% year-over-year as of February — the greatest annual spike for any U.S. city. Given the latest federal data on median household income, Miami now ranks as the least affordable region in the country, with the typical tenant paying a staggering 59.5% of monthly household income to pay rent. As Realtor.com notes, the federal housing department considers affordable rent to cost 30% of household income, and anything more to be unaffordable.

▪ Monthly home rents rose sharply in 2021 across South Florida, with some communities seeing as much as a 34% annual increase in December compared with a year ago. While locals largely blame the wave of newcomers to the Miami and Fort Lauderdale areas, experts say there are solutions: build more apartments priced affordably for the working class and companies should boost wages.